India's Residential Real Estate Poised for 10-12% Annual Growth Through FY27
NEW DELHI: India’s residential real estate sector is expected to chart a steady course over the next two fiscal years, with sales value likely to grow at 10-12% annually, driven by rising demand for premium and luxury housing, according to a new report by Crisil Ratings.
Sales volumes are expected to rise 5-7% while average prices may see a moderate 4-6% appreciation, reflecting continued end-user demand, improved affordability through lower interest rates, and smoother project launches across key urban markets. This comes after three years of post-pandemic boom during which the sector clocked a compound annual growth rate (CAGR) of 26% in value terms.
The trend is underpinned by an increasing appetite for premium homes. Launches in the premium and luxury segments surged from 9% in 2020 to 37% in 2024, and are expected to rise further to 38–40% of total new launches in 2025 and 2026. In contrast, affordable and mid-segment housing launches are projected to decline significantly due to rising land and construction costs, making them less viable for developers.
“Urbanisation and rising incomes are fuelling demand for larger, more luxurious homes. The trend of premiumisation is expected to continue, anchoring steady price growth over the medium term,” said Gautam Shahi, director of the company.
Even as overall supply continues to outpace demand — pushing inventory levels slightly higher to 2.9–3.1 years — Crisil believes developer credit profiles remain strong, buoyed by healthy collections and reduced leverage. Asset-light models like joint ventures and joint development have further helped improve balance sheets.
“Developers’ ability to maintain disciplined leverage and keep inventory in check will be key to sustaining momentum in the coming years,” said Pranav Shandil, associate director of the company.
